Southland dairy jobs lost in China rule change

HARD TO SWALLOW: Blue River managing director Keith Neylon says the company has had to make some tough staffing decisions over its inability to secure exports into China.

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Sheep-milk business Blue River Dairy is laying off some staff as it struggles to secure its infant formula plans in China.

The Southland company produces foodstuffs such as cheese, ice cream and milk powder, with about 80 per cent of its sheep-milk powder exported.

Blue River Dairy products managing director Keith Neylon confirmed a "limited number" of redundancies at his Invercargill business that were the result of a change in regulations in exporting infant formula to China.

It is understood at least 10 people may have lost their jobs.

Neylon said the company had to stop sending its formula to China after that country's certification and accreditation administration cut the number of permitted imports of infant formula.

The strict new Chinese regulations came in on May 2, tightened up who could export infant formula to the country Neylon said.

He believed other New Zealand exporters, who have brands in the China market, would also experience difficulties.

While Blue Dairy had complied with the new rules, it was still waiting to be formally registered by the Chinese, he said.

"We ticked off everything but we are still waiting to be certified on the Chinese side," Neylon said.

"No date has come through for the past three months so we have had to park our infant formula operation."

The Ministry for Primary Industries was working with Blue River but there was no time line to get the approval needed.

"It could be two weeks, four months, we have no idea," Neylon said.

"It was bureaucratic administrative change and there is little we can do except wait. We are in a holding pattern going around in circles."

The redundancies come as the company is forced to revert to focusing on its powdered sheep milk products for the near future.

Neylon said the company had no choice as sacrifices had to be made to protect it.